What Is Drop Shipping and Why Should You Care?

What is drop shipping and how could it impact positively on your finances? You may want to give serious thought to this form of marketing and how you can put it at the very heart of your business and save yourself a great deal of stress and money.

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What is drop shipping?

Like all good ideas drop shipping is a simple concept. After you make a sale you contact the supplier of that item and buy it but get them to ship it directly to your customer. You may have also heard this referred to as arbitrage.

The advantages

Tying up money in stock isn’t a great idea, especially if you are a sole trader, perhaps working from home. Drop shipping eliminates this problem, what’s more you make a sale before you need to buy.

Buying products in bulk, storing them and distributing them will probably mean that you are paying less per unit but when you take into account the additional costs of storage, distribution, handling and paying up front, drop shipping has a lot to commend it.

If you are a lone entrepreneur time management is of vital importance and I would suggest that you should spend 90% of your time concentrating on marketing. You are not, essentially, a manufacturer, wholesaler or distributor so I maintain that you should focus on generating sales and leave others to do the boring time consuming stuff.

If you have made a sale then you have a responsibility towards your customer, however if the product is faulty or unwanted then they will be returned to the supplier not you. You may be involved in a couple of telephone calls or emails but again you will avoid handling the merchandise.

In short you can operate on a large scale without the usual hassles associated with traditional retailing.

What is drop shipping to do with online auctions?

If we take the notion of keeping overheads to a minimum, working from home and at the same time increasing income a stage further then there is a way of combining online auctions and drop shipping.

The best known, and largest, online auction house in the world is, of course, eBay. For the stay at home full time, or part time, business person eBay is great example of eliminating a lot of the difficulties associated with making money online. You don’t need to build a website or generate potential customers, eBay does all that for you leaving you free to get on with the essential business of offering first class products for sale.

Discovering how to identify which items sell best on eBay and where to find suppliers that will drop ship them to your customers needs to be the subject of another article however I’m sure that you can appreciate the huge potential for this marketing strategy.

I trust that I have answered the question ‘What is drop shipping’ and I hope also that you can see why you should care if you have any interest in creating a second or perhaps full time income that is as uncomplicated as possible.